GFG runs into snag on aluminum financing

A United States-based equity firm reportedly has filed a suit that could put up a barrier to a previously announced loan from Glencore to the troubled GFG Alliance to help fund operations at its European aluminum facilities.

The London-based Financial Times is reporting that New York-based American Industrial Partners has undertaken legal proceedings involving the GFG scrap-melting rolling mill in Duffel, Belgium. GFG subsidiary Alvance purchased that facility from Aleris last year.

The same news report indicates Glencore is most interested in the GFG primary aluminum smelter in Dunkirk, France, but the Belgian mill also is part of the deal. The U.S. equity group is filing to claim that since the Belgian plant owes it $59 million, the equity firm should take over administration of the former Aleris mill in Duffel.

The Financial Times reports “people familiar with the situation” as saying Glencore is “primarily interested in the Dunkirk aluminum smelter” and the primary aluminum it makes. Thus, one outcome could entail GFG and Alvance maintaining control of that French smelter “but losing control of the Belgian mill to the U.S. private equity firm.”